Bankruptcy judge says Daufuskie resort can be sold in parcels

A bankruptcy judge has divided the assets of the Daufuskie Island Resort & Breathe Spa into groups and allowed creditors to claim many of them after an auction last month produced no bidders for the entire property.

The trustee overseeing the bankruptcy will continue trying to sell the property as a whole until the creditors' deals close, a trustee's spokesman said.

The resort was once a major employer on the sparsely developed island off the southern tip of Hilton Head Island.

If a single buyer doesn't emerge, AFG, a private investment group that loaned money to the resort before the bankruptcy, will assume the Melrose golf course and other amenities, which include two lodges, a conference center, a swimming pool, an equestrian center, tennis courts and two beach cottages, according to Tobin Spirer, a spokesman for trustee Robert C. Onorato.

Bank of North Carolina -- the successor to Beach First National Bank, which loaned money to the resort before failing in April -- will assume the Melrose beach club and several cottages.

The marina at Melrose Landing, the Bloody Point golf course, employee housing and other land will be retained. Onorato will then seek to sell those assets separately to pay back other creditors. He expects to get $4.5 million to $5 million for them, Spirer said.

Several technical issues have slowed the process. They included the question of whether previous owner Bill Dixon, who declared bankruptcy on behalf of the resort in 2009, would be allowed to bid on properties as a creditor.

Dixon claimed he had a mortgage of more than $34 million on the property, but other parties disputed that claim. Judge John E. Waites ruled Dixon was not eligible to bid.

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